'f*L 


he Panama Canal Route 


THE AMERICAN PRESS 


ON THE 


tlantic and Pacific! 
Transport Company 


AND ITS PLAN 


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PO MAKE THE PANAMA CANAL 
PROFITABLE TO THE PEO¬ 
PLE OF THE UNITED 
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These comments are representative 
of the wide discussion in the press of 
America which followed the incorpora¬ 
tion of the Atlantic and Pacific Trans¬ 
port Company on September 5th, 1911. 
The American newspapers printed 
thousands of columns about the new 
enterprise and made it one of the news 
events of the day. 




\ 


\ 



THE GREATEST CLEAN-CUT STEAM¬ 
SHIP PROPOSITION THAT HAS 
EVER BEEN EVOLVED IN THE 
UNITED STATES. 

[From the Baltimore News, Sept. 10, 1911.] 

Much encouragement is being received by 
the Atlantic and Pacific Transport Company, 
organized by B. N. Baker and his associates 
last week. Thousands of columns have been 
printed about it, and long accounts have ap¬ 
peared in more than 5,000 publications in the 
United States and in many of the important 
newspapers of Europe. 

The plan has been received everywhere with 
great favor and the mail at the Baltimore head¬ 
quarters in the Calvert Building has become 
heavy with approvals and inquiries. One of 
the strongest letters received is from Edwin S. 
Cramp, the noted shipbuilder, who has spent 
his life in shipping interests and who has 
recently been an important expert witness at 
the various inquiries made by Congress regard¬ 
ing the merchant marine and America’s future 
policy. 


Mr. Cramp’s Letter. 

Mr. Cramp writes as follows from New York: 
Dear Mr. Baker: 

Permit me to express to you my appreciation of 
the greatest clean-cut steamship proposition that 
has ever been evolved in the United States, and I 
sincerely believe that it will be successful and 
profitable from the very beginning. 

You have made an excellent use of the possibili¬ 
ties of the act of 1891, and in a way never utilized 
by the present beneficiaries of the act, and you 
deserve, therefore, all the greater credit for your 
forethought. 


Yours very truly, 

Edwin S. Cramp. 


5 


DUTY OF ALL AMERICANS. 

[From the Engineering Record, N. Y., Sept. 9, 1911.] 

A Panama Canal Steamship Line has been 
incorporated at Trenton this week by men 
thoroughly posted in the organization of mer¬ 
chant marine service. The company is the 
Atlantic and Pacific Transport Company and its 
incorporators are Mr. B. N. Baker, of Balti¬ 
more, and a number of his former associates 
in the Atlantic Transport Company and Mr. 
Adrian H. Boole, formerly connected with the 
Wilson Line of Hull, England. This company 
proposes to bid on the ocean-mail service for 
which the Postmaster-General will receive 
tenders on November 25. This service is a 
weekly one between New York and Colon, New 
Orleans and Colon, and San Francisco and 
Panama, and fortnightly between Seattle and 
Panama. It is commonly believed that Mr. 
Baker has been devoting more time to a study 
of the utilization of the canal than any other 
American interested in shipping, although 
others have devoted considerable attention to 
the subject. As a result of these investiga¬ 
tions he believes that, if railroad interference 
with tolls can be prevented, it will be possible 
to build up a large business between New 
York, Charleston and Savannah on the At¬ 
lantic Coast, and San Pedro, San Francisco, 
Astoria and Seattle on the Pacific Coast, to 
engage in a lucrative business on both coasts 
of Central America served by small vessels 
or barges operated by the company; and to 
interchange a large amount of freight at Colon 
and Panama between the company’s fleet to 
vessels plying down the two South American 
coasts. The organization of this company after 
such thorough investigation and its announced 
determination to begin at once the construction 
of a fleet of at least 15 steamers should bring 
home to everybody the fact that the period of 


6 


usefulness of the canal is shortly to begin. It 
is the duty of all Americans to make the canal 
of maximum usefulness to our country and not 
permit its efficiency to be diminished by the 
pressure which is now being brought by railroad 
interests to persuade Congress to nullify, in a 
measure, the competitive value of the canal 
route. 


A HOPEFUL BEGINNING OF A MER¬ 
CHANT MARINE. 

[From the New York American, Sept. 8, 1911.] 

Two oceans without American ships! The 
seven seas without sailing vessels! And the 
costliest canal in the world without a merchant 
marine! 

This is the anomaly upon which the statesmen 
of American commerce batter the understand¬ 
ing and the patriotism of Congress in vain. 

It is good to know that private enterprise and 
capital are making a start to alter the lamen¬ 
table conditions of American trade. The At¬ 
lantic and Pacific Transport Company, with 
a capital of $15,000,000, was incorporated at 
Trenton on Tuesday. The company is planning 
the construction of fifteen speedy, modern 
steamers, and will be the first bidder for the 
new Government mail service between New 
York and Colon, New Orleans and Colon, San 
Francisco and Panama and Seattle and Panama. 
There will be 4,200,000 tons of traffic when the 
canal is opened, and the new company v/ill bid 
for it. Its enterprise deserves every generous 
consideration. 

Behind the new enterprise stands Bernard 
Baker, of Baltimore, who has been working on 
the plan for years, and whose genius and 
energy ought to make him richer and more 
famous. Mr. Baker discovered on a visit to the 
isthmus that the Transcontinental Railroad pool 
had been paying more than $1,000,000 a year 


7 



to the Panama Railroad to suppress competi¬ 
tion, and the railroad fulfilled its contract by 
refusing to build its line to deep water. The 
matter was brought before Congress. 

Mr. Baker is one of the men who do things— 
great things—and richly deserve the fruitage of 
them. 

It is to be hoped that his great enterprise will 
succeed, and that its success will stimulate other 
American capitalists to redeem the Govern¬ 
ment’s shameful parsimony toward the Ameri¬ 
can merchant marine. 


MR. BAKER’S ENTERPRISE. 

[From the Baltimore Evening Sun , Sept. 7, 1911.] 

The New Atlantic and Pacific Transport Com¬ 
pany starts out with extremely ambitious plans, 
but the fact that Mr. Bernard N. Baker is at 
the head of it and that he has a number of old 
Atlantic Transport men behind him is sufficient 
guarantee that those plans will not fail for lack 
of energy and skill. Mr. Baker is a steamship 
expert of the first rank, a man who knows all 
that is worth knowing about ocean transporta¬ 
tion, and if he sees business ahead for the new 
company it may be confidently assumed that 
the business is actually there. He made the At¬ 
lantic Transport Company a success in the face 
of foreign competition which brought only dis¬ 
couragement and failure to many another Amer¬ 
ican shipowner, and there is every reason to be¬ 
lieve that he can duplicate the feat. 

Meanwhile, it is in order to wish Mr. Baker 
every success in his huge enterprise. We may 
all take pride in the work of this energetic and 
far-seeing Baltimorean. Retirement was not 
for him. He had to get back into harness—and 
at 57 he is still a young and ambitious man, 
with plenty of time ahead of him to prove his 
mettle again. 


8 



SHIPS FOR THE PANAMA CANAL. 

[From the Chicago Record-Herald,, Sept. 11, 1911.] 

Certain features in the charter of a company 
just incorporated to build ships and to operate 
them between New York and San Francisco by 
way of the Panama Canal are of interest as 
showing the policy of the United States Gov¬ 
ernment regarding American lines for this 
traffic. The service is to be absolutely inde¬ 
pendent of any competitive rail or steamship 
enterprise; nobody connected in any way with 
a competing line is to be eligible as a director 
in the new company. Another feature, due to 
government requirements, is that underwriting 
syndicates and stock watering for the benefit of 
promoters are absolutely barred. 

In return for these provisions the govern¬ 
ment binds itself not to let mail contracts to 
any steamship company not conforming to the 
same requirements. Thus it appears that there 
will be competition with the transcontinental 
railroads, by water, for the carrying of the mails 
between our eastern and western coasts by the 
opening of the canal in 1913. 

The incorporation of this company seems the 
beginning of preparations on a large scale for 
the opening of the canal in 1913. Certainly it 
is to be desired that the canal, dug by the 
United States, should be used by vessels of this 
country, and that in the carrying of the mails 
there should be competition. The building of 
the canal might be justifiable, of course, as a 
military enterprise even if the traffic through it 
were to be, as has often been predicted, only 
that of ships flying foreign flags, but it will be 
no small gratification to American pride, and 
perhaps no small benefit to the nation, to have 
lines of American ships using it as soon as it is 
opened. 


9 


TO UTILIZE THE CANAL. 

[From the St. Louis Globe-Democrat, Sept. 9, 1911.] 

At last there are some indications that Ameri¬ 
cans are going to utilize the Panama Canal for 
other than naval purposes. What is called the 
Atlantic and Pacific Transport Company has 
been formed, with an authorized capital of 
$15,000,000, to run steamships between Boston, 
New York and other Eastern points and San 
Francisco, Portland and Seattle. 

This is a pleasing revelation for Americans. 
It was thought that the chief commercial bene¬ 
fits of the canal would go to Europe, but pos¬ 
sibly this was a mistake. A few months ago 
the Hamburg-American line arranged for dock 
facilities in San Francisco and Seattle, prepara¬ 
tory to the establishment of direct communica¬ 
tion between the big German gateway and 
America’s principal ports on the Pacific. As 
this is one of the greatest of the steamship 
lines which reach our Atlantic ports, and is 
steadily increasing its activities, no surprise was 
caused by this announcement. Nor was there 
any doubt that the promise would be kept when 
it was said that the company would have its 
new vessels ready at the date fixed for the 
opening of the canal. Other European lines 
are also negotiating for dock facilities at our 
chief ports on the Pacific, so that the canal is 
sure to have much traffic as soon as it is ready 
for business. In matters of this sort Europe 
is alert, and that region quickly saw the pos¬ 
sibilities for big trade with the great Western 
ocean as soon as the short cut at Panama is 
ready to admit vessels. France and England 
are to use the canal for this purpose, so report 
says, as soon as opportunity presents itself. 
The present prospect is that Panama will, very 
early in its career, surpass Suez in the volume 
of its activities. 


10 


Americans will be glad, therefore, to learn 
that their countrymen will appreciate the ad¬ 
vantages of sending their own merchant ships 
through this waterway. It will cost us at least 
$400,000,000. We are paying the entire cost 
of construction and maintenance, and the rest 
of the world has the privilege of using it in 
peace times on the same terms as ourselves. 
No discrimination will be made for or against 
anybody. The tolls, whatever they may be, will 
be the same for American ships as for those of 
England, France, Japan and the rest of the 
world. No other such act of altruism was ever 
performed by any country. To almost any 
other nation the cost would be prohibitive. 
Many years will pass before the actual com¬ 
mercial and industrial benefits of the canal will 
pay us for our outlay. But the compensation 
will come early in proportion to the extent to 
which Americans use this waterway themselves. 
Our shippers have long been wishing for a short 
cut between the world’s two big oceans, and 
when they get it they should utilize it to the 
largest practical extent. It was said that the 
transcontinental railway companies fought the 
canal project for years, under the fear that it 
would injure them in transportation between 
the Atlantic and Pacific ports. Perhaps they 
were right. Some of the competition which 
they looked for is already preparing to assert 
itself. It is only fair to presume, however, that 
in aiding to develop the Pacific Coast the 
steamers by way of the canal will help to largely 
increase the traffic with the interior, and this, 
of course, will be handled by the railways solely. 
It would appear, therefore, that all our great 
interests will be benefited by the canal. One 
of the heads of the Atlantic and Pacific Trans¬ 
port Company declares: “Our company will 
bid on the ocean mail service now being adver¬ 
tised for by the Postmaster-General, which calls 
for weekly service between New York and 


11 


Colon, between New Orleans and Colon, be¬ 
tween San Francisco and Panama, and, fort¬ 
nightly, between Panama and Seattle. We pro¬ 
pose to establish and maintain these ocean 
routes, and to extend the service through the 
canal from coast to coast.” It is reported that 
the capital has all been subscribed, and that the 
company will have all its vessels on hand on 
schedule time. All the world awaits the open¬ 
ing of the canal with large interest. At a vast 
cost, by a nation which was not dreamed of 
when Charles V.’s engineers made the first sur¬ 
vey across the isthmus, a dream of four centu¬ 
ries is soon to be transmuted into fact. 


PANAMA CANAL BENEFITS. 

[From the Philadelphia Public Ledger, Sept. 7, 1911.] 

This country is expending in the neighbor¬ 
hood of $400,000,000 upon the Panama Canal, 
not wholly as an altruistic gift to the world to 
facilitate the movement of its commerce, but 
in the expectation of securing thereby certain 
substantial benefits, strategic and commercial, 
for itself. While the Government may be re¬ 
lied upon to see that the former benefits are 
secured, the country must necessarily be de¬ 
pendent in the main upon private enterprise 
for the development of the commercial ad¬ 
vantages that are to accrue from the piercing 
of the Isthmus. Those advantages include not 
only a closer intercourse with the peoples of 
South and Central America, and a larger share 
of the trade originating with them, but the 
cheapening of transportation across the Ameri¬ 
can Continent. Heretofore the country has 
been wholly dependent upon the transconti¬ 
nental railroads for this important service, the 
control of the steamship lines to Panama by the 
railways effectively preventing competition. 


12 



President Taft in his annual message last 
December urged the wisdom of amending the 
interstate commerce law by adding a provision 
“prohibiting interstate commerce railroads from 
owning or controlling ships engaged in the 
trade through the Panama Canal.” The Presi¬ 
dent expressed the opinion that such a provision 
“may be needed to save to the people of the 
United States the benefits of the competition in 
trade between the eastern and western sea¬ 
boards which this canal was constructed to se¬ 
cure.” In these two sentences Mr. Taft recog¬ 
nized a condition and a danger. The Congress 
has not yet seen fit to act upon the suggestion, 
but the announcement has just been made of 
the formation by private capital of a steamship 
company which is to meet these conditions and 
furnish the competition. 

Baltimore shipping men of long experience in 
ocean transportation have organized the “At¬ 
lantic and Pacific Transport Company,” and 
have taken great pains so to frame their charter 
as to assure the independence of the line from 
railroad control, recognizing that as the menace 
which has wrecked every previous attempt to 
enter into real competition by water with the 
existing transportation interests. Considerable 
legal ingenuity has been displayed in the in-^ 
vention of conditions and restrictions which 
shall prevent the dreaded encroachment of rail¬ 
road influence; whether it will prove success¬ 
ful, or whether the drastic restrictions which 
have been devised can be evaded, time alone 
will determine. 

In the meantime the entrance into the coast¬ 
wise shipping field of a company with ample 
capital, to develop commerce by water between 
the Atlantic and Pacific coasts, as well as to tap 
the lines of world commerce which are expected 
to converge at the Isthmus, is an enterprise of 
the first magnitude. It will involve, of course, 


13 


immediate work for our own shipbuilders if the 
contemplated fleet is to be ready by the time of 
the completion of the canal. But of far greater 
importance, it will, if conducted as a genuinely 
independent service, afford a definite check 
upon the transportation monopoly that has been 
built up between the East and West, and furnish 
an accurate measure of worth to the country 
of the rail transportation facilities it now pos¬ 
sesses. Moreover, the vision that is held out 
of comfortable through passenger service to 
and from the Pacific coast is an alluring one. 
These things may seem “too good to be true,” 
but the character and standing of the men 
whose names are associated with the new under¬ 
taking justify confidence that they really intend 
to put the country in the way of saving to the 
people of the United States the benefits for 
which the Panama Canal is being built. 


WHEN THE CANAL OPENS. 

[From the Pittsburgh Times, Sept. 8, 1911.] 

A glimpse of what may develop in the way of 
improved transportation facilities between the 
Atlantic coast and the Pacific when the Panama 
Canal shall have been completed is afforded in 
the plans of the Atlantic and Pacific Transport 
Company, which has just been incorporated in 
New Jersey with a capital of $15,000,000. The 
intention is to bid on coastwise mail contracts 
between New York, New Orleans and Colon 
and between Seattle, San Francisco and Panama 
and to prepare for traffic through the great canal 
when that highway from sea to sea is opened 
to the ships of the world. Fifteen steamers are 
to be constructed to start with and if the com¬ 
pany is successful in its government bids it will 
have a mail business of nearly $800,000 an¬ 
nually. That prospect, naturally, has had great 
weight in forwarding the enterprise. 


14 



Back of this project, the most important of 
its kind undertaken under the American flag 
in recent years, is the outlook for the common 
carrying trade by water once the Panama Canal 
is in operation. It is estimated that fruit grow¬ 
ers of California alone will be able to save 
$15,000,000 a year on fruits by using the water 
route. The economies that may be effected in 
general transportation, both ways, can only be 
guessed at. It appears certain, however, that 
the Pacific slope will be an enormous gainer, 
and in anticipation of an increased volume of 
business on more favorable terms cities like 
Seattle and Portland, San Francisco, Los 
Angeles and San Diego, on the west coast, not 
to mention eastern ports or New Orleans, are 
making improvements and enlarging their mer¬ 
chandising, manufacturing and forwarding fa¬ 
cilities on an extensive scale. 

This new transport company is of especial 
significance because the merchant marine of the 
United States has languished so many years, 
without encouragement by Congress or at the 
other field of commerce save this of shipping 
we have been aggressive and have held our 
own, and the New Jersey corporation now hopes 
to set the pace on the sea. Millions of foreign 
trade on this continent have been lost to our 
country by lack of merchant vessels, and we 
have not even been forehanded enough to make 
the best use of the open sea for the encourage¬ 
ment of domestic business. The Panama Canal 
promises to transform in more ways than one 
and its completion will be the triumph of centu¬ 
ries. 


15 




NEW PANAMA SHIP LINES WILL 

PROSPER WITHOUT INJURING 

RAILROADS. 

[From the New York Tribune, Sept. 6, 1911.] 

The formation of another company to operate 
a numerous fleet of ocean steamers between the 
Atlantic and Pacific ports of this country by way 
of the Panama Canal is a step in the right direc¬ 
tion. 

The date of the opening of the canal is now 
so near at hand that it is quite obvious that if 
the country is to rank above the fourth or fifth 
place in use of the waterway which in itself is 
creating it must bestir itself vigorously and 
without delay. Ships cannot be built and com¬ 
mercial routes established and traffic contracts 
made in a day. 

The question of alleged intrigues and influ¬ 
ence exerted by transcontinental railroad lines 
to prevent the development of competition by 
water routes need not be entered into in detail 
at this time. We should not wish to see a 
partial or unfair competition created which 
would ruin the railroads or gravely impair their 
legitimate prosperity, but we do not imagine 
that there is the slightest probability of such a 
thing at Panama. Legitimate competition on 
fair and equal ground, is something which the 
roads must expect to meet. 

The estimate that there is and will prove to 
be room for all is doubtless correct, according 
to the lessons of experience. It is an old and 
invariable rule that the increase of facilities 
leads directly to increase of use. There will be 
an expansion of commerce which will give the 
ships all the business they can handle and at 
the same time keep the railroads as busy as 
they are now, and as prosperous. 


16 



WILL PUSH PLANS TO BUILD 

STEAMER LINE FOR THE CANAL 
TRADE. 

[From the Philadelphia North American, Sept. 8,1911.] 

Maritime, railroad and banking interests here 
and elsewhere in the United States are unusu¬ 
ally stirred by the proposition just launched by 
Bernard N. Baker, of Baltimore, for a huge 
American steamship service, to be inaugurated 
with the opening of the Panama Canal in 1913. 
The whole scheme is novel and comprehensive. 
It involves a great investment in modern steam¬ 
ships of American construction. 

Mr. Baker is a practical steamship man of 
large experience. He created the Atlantic 
Transport Line. He is a man of unusual force, 
of courage and of large financial strength and 
following. With business associates, he caused 
to be chartered this week under the New Jer¬ 
sey law the Atlantic and Pacific Transport Com¬ 
pany, with an authorized capital of $15,000,000. 

Plans contemplate the construction of fifteen 
express passenger and freight steamers, to be 
the equal of any ships England, Germany, 
France or Japan is likely to put into service 
through the Panama Canal. This is predicated 
upon getting the authorized United States mail 
contracts for the run from New York to Colon, 
from New Orleans to Colon and from San Fran¬ 
cisco to Panama, including a fortnightly service 
between the Puget sound cities and the Pacific 
terminus of the canal. 

Concerning these contracts Mr. Baker in an 
interview in New York yesterday, said: 

“It is not merely the carriage of the ocean 
mails that I look for to aid in the development 
of the American marine, but the second and 
equal purpose of the Act of 1891, under which 
Postmaster Hitchcock is now acting. That act 
is described as ‘An act to provide for ocean 
mail service between the United States and 
foreign ports and to promote commerce.’ 


17 


"The prospects of commercial success I con¬ 
sider very good. We shall carry freight to and 
from the transshipping port of Balboa on the 
Pacific, destined to become one of the greatest 
centers of cargo transfer and distribution in the 
world. And we shall carry through freight from 
one side of the United States to the other. 
Perishable freight like fruit will come better 
by water than by land, as ships properly 
equipped with refrigerating apparatus will be 
less expensive than cars that have to be refilled 
with ice.” 

Besides the passenger and mail ships the 
company intends operating lines of slow cargo 
steamers running from Atlantic to Pacific ports. 
It also proposes to construct and operate an 
auxiliary fleet of barges for river and harbor 
service. Mr. Baker says there are five ship¬ 
yards in the country able to build the fifteen 
mail steamers proposed, among these being Wil¬ 
liam Cramp & Sons Ship and Engine Building 
Company and the New York Shipbuilding Com¬ 
pany in Camden. 

One novel and important feature of the 
proposition aims to promote closer commercial 
operations between the United States and Cen¬ 
tral and South American points. Every ship in 
the fleet will carry a banking department. In 
other words, the company, through trained men 
on its ships, will conduct certain kinds of bank¬ 
ing business which go hand in hand with com¬ 
merce between people in different countries. 

The idea of this is to neutralize the disadvan¬ 
tage caused by the lack of banking facilities in 
many parts of South America. It will be a 
formidable bid for some of the $140,000,000 
trade that is at present mainly going to Euro¬ 
pean merchants. It will permit of payment in 
cash or in bills that will be as good as cash, and 
do away with much tedious delay. 


18 


PROMISE OF SHIPS. 

[From the Chicago Economist, Sept. 16, 1911.] 

The project undertaken by the Atlantic and 
Pacific Transport Company holds out better 
promise of the creation of some important 
American ships than anything that has here¬ 
tofore been announced provided the claims of 
the projectors are well founded. Bernard N. 
Baker, of Baltimore, the chief promoter of the 
enterprise, says: “I do not see why the ships 
could not be built at nearly as low a cost as 
in Europe. They would be of a single pat¬ 
tern, and there would be no expenses for vari¬ 
ous designs.” Other authorities have declared 
that the cost of constructing and operating 
American ships sailing the high seas would 
be so great that they could not possibly com¬ 
pete with ships of European construction. And 
of course these vessels must compete with 
those of Europe. European vessels cannot en¬ 
gage in our coastwise trade but they can meet 
us anywhere between the ports of different 
countries. 


TEIROUGH PANAMA TO THE 
PACIFIC. 

[From the Baltimore Sun, Sept. 6, 1911.] 

The value of the Panama Canal will depend, 
to a great extent, on its use in furthering Amer¬ 
ican trade. If we fail to establish new steam¬ 
ship lines between the Atlantic and Pacific ports, 
to South America and the Orient, a large part 
of the advantage will be lost. Among the first 
to recognize the importance of such provision, 
Mr. Bernard N. Baker, of Baltimore, proposes 
to put his ideas into operation by the establish¬ 
ment of a line of steamers to furnish service 
from New York, Baltimore and New Orleans 
through the canal to the Pacific Coast. His 


19 



plans already are far advanced, and the com¬ 
pany has been incorporated. 

The way has been opened by the action of 
the Postmaster-General, whose advertisement is 
appearing in the Sun and fifteen other news¬ 
papers, calling for bids on three ocean mail 
routes—one from New York to Colon, another 
from New Orleans to Colon, and a third from 
Seattle and San Francisco to Panama. Inter¬ 
mediate stops will be made at Charleston or 
Savannah, or both, and at San Diego or San 
Pedro (Los Angeles), or both, and Astoria 
(Portland). This would give weekly sailings 
between New York and San Francisco, and 
every two weeks to Seattle. The Postmaster- 
General distinctly states that the contracts will 
not be awarded to any company under railroad 
control. 

Being independent, the new line will become 
an immediate competitor of the transcontinental 
railroads, and should be an important factor in 
regulating freight rates between the Pacific 
and Atlantic Coast cities. Its promoters believe 
that on California fruits alone freights can be 
reduced by $15,000,000 when the canal is open 
to traffic, and at the reduced rates the line can 
still earn a handsome profit. The new ships, 
we are promised, will expedite mails and 
freights to South America, and, with additional 
banking facilities provided, will be an important 
factor in capturing the immense South Ameri¬ 
can trade, now almost monopolized by Euro¬ 
peans. 

If we are to make our $400,000,000 Panama 
investment a paying proposition, we must build 
up our merchant marine and extend our foreign 
commerce. It is gratifying to see a Balti¬ 
morean take the lead in this vast undertaking, 
and to learn that this city will be the headquar¬ 
ters of the company. Mr. Baker has made a 
close study of the Panama Canal and trade con- 


20 


ditions, and has made an extended report to 
President Taft on the subject. He made the 
suggestions for the docks at Panama that were 
adopted by the Isthmian Canal Commission. If 
he succeeds in organizing the company whose 
steamers will sail the Panama route, it will be 
a notable achievement that will put Baltimore 
in the front rank of international ports. 


A GREAT INDEPENDENT AMERI¬ 
CAN STEAMSHIP LINE. 

[From the Baltimore News, Sept. 6, 1911.] 

For many years past Europe has been laugh¬ 
ing up her sleeve at the blindness of this coun¬ 
try with respect to South America. The Amer¬ 
ican people as a nation are more ignorant of 
this rich continent to our south than any Euro¬ 
pean country, and, we may almost say, of any 
of the enlightened Asiatic countries. 

It is doubly gratifying, therefore, to feel that 
Baltimore is to take the lead in the develop¬ 
ment of trade and commerce with South Amer¬ 
ica. The Atlantic and Pacific Transport Com¬ 
pany, which was incorporated at Trenton yes¬ 
terday and which owes its origin to the in¬ 
defatigable efforts of Bernard N. Baker of this 
city, while intended primarily to bring our At¬ 
lantic and Pacific coasts closer together through 
the Panama Canal and establish a freight 
service in competition with the great transcon¬ 
tinental railroads, will actually do a great deal 
more than this by energetically and systemati¬ 
cally stimulating and developing trade in South 
America. 

For years past Mr. Baker has made a most 
careful study of this entire situation. His 
Company bids fair to be the first great inde¬ 
pendent steamship line to engage in Atlantic 
and Pacific traffic by way of the canal. 


21 



MODERN AMERICAN SHIPS. 

[From the New York Commercial, Sept. 8, 1911.] 

Second Assistant Postmaster-General Stewart 
has been quoted at Washington as saying that 
so far as the department is advised there are 
no steamships now in existence—American or 
foreign—that conform to the requirements laid 
down in the advertisement of July 20 asking 
for bids for ocean mail service on the Atlantic 
and Pacific coasts through the Panama Canal. 
Owners of foreign steamships would not be 
eligible for bidding, of course, the service being 
to and from American ports and those in the 
Canal Zone. This proposal was the direct 
cause of the organization at Trenton on Tues¬ 
day of the Atlantic and Pacific Transport Com¬ 
pany, capitalized at $15,000,000— which, if it 
gets the award, will proceed forthwith to con¬ 
struct the ships necessary for the service. 
Other companies may be organized with the 
same purpose in view, or existing concerns may 
become bidders; but in any event this step by 
the postoffice department means the construc¬ 
tion within the next three years or so of a fleet 
of big, swift American steamships—and in 
American shipyards. The scope of the mail 
service contemplated is outlined, briefly, in this 
way: From Seattle, with right of call at 

Astoria, to Panama once every two weeks, 
twenty-six trips a year, calling at San Francisco 
and alternately at San Pedro and San Diego, 
California, and from San Francisco to Panama 
once every two weeks, twenty-six trips a year, 
calling alternately at San Pedro and San Diego, 
California. Time from Seattle to Panama, six¬ 
teen days, and from San Francisco to Panama, 
ten days. From New York to Colon, calling at 
Charleston and Savannah once each week, fifty- 
two trips a year. Time to Colon six days. 
From New Orleans to Colon, once each week, 
fifty-two trips a year. Time to Colon four days. 


22 


In each instance the contract would cover a 
period of ten years. If one company were to 
get the entire award, it would no doubt receive 
a maximum of about $775,000 a year for this 
mail service—and the money would not be a 
government subsidy in any sense of the word; 
thus in ten years the company would receive 
$7,750,000 for its mail service alone, not to 
mention the enormous freight and passenger 
traffic capable of being built up by vessels of 
this type on these promising coastwise routes. 
The prize is well worth fighting for. And as 
the bids will not be open until late in Novem¬ 
ber, there is ample time for American capital¬ 
ists to “figure” on the government’s proposal. 
The way appears to be open once more for 
American shipbuilders to turn out some big 
steamships other than warcraft. 


THE BEGINNING OF THE END. 

[From the Brooklyn Standard Union, Sept. 10, 1911.] 

This $15,000,000 Atlantic-Pacific transport 
scheme, with its track charts, linking the two 
Portlands and intermediate cities on both sides 
of the continent, comes like a sharp reminder 
to one wakening from sleep. We have so long 
thought and talked of the Panama Canal, as we 
have of the subway extensions, as of the remote 
and indefinite future, that the certainty that the 
day of actual opening and operation is com¬ 
paratively close at hand brings something of 
surprise. Coincident with the American enter¬ 
prise is a British one of almost equal propor¬ 
tions, so that it is evident that, as usual, the 
business world is awake before the official and 
the political, and that events are already shap¬ 
ing themselves to meet the new conditions. To 
forecast with any accuracy what the canal will 
be, as a factor in the world’s transportation, is, 
however, at the present time premature. 

23 


v 



The immediate, practical importance of the 
steamship announcement is in its demand upon 
legislation; its insistent call upon Congress that 
the tolls, terms and other conditions upon which 
the canal shall be opened to the commerce of 
the world shall be definitely stated at the 
earliest possible date, in order that capital and 
enterprise may go hand in hand to the full de¬ 
velopment of the usefulness of the new water¬ 
way. Congress has so far preferred to play 
politics; to imitate the Spanish “manana” policy 
instead of meeting the issues and its responsi¬ 
bilities squarely and in a businesslike way, a 
method which can no longer be tolerated. The 
canal, it should not be forgotten, is the prop¬ 
erty of the people, built by their money and to 
be operated for their account and profit, and, 
therefore, the duty of suitable preparation de¬ 
volves clearly and imperatively upon Congress. 
Recent events in the courts, too, emphasize the 
necessity of early and definite legislation. If 
we are left to the deplorable fate of a revised 
edition of the Sherman act, or any other form 
of intricate and inadequate enactments which 
require twenty years to construe, and even then 
the courts are unable to reduce to definite terms 
as rules of action, the result will be little less 
than a public calamity, and greatly lessen the 
credit for the construction and the administra¬ 
tion of the canal. Indeed, it is not too much to 
say that if the next Congress would lay aside 
for a little president-making and presidential- 
politics, enact effective Panama Canal regula¬ 
tions, a parcels post and, more important than 
either, an adequate currency reform bill, it 
might very well go to the people upon these 
alone, rather than undertake to include the com¬ 
plex and indefinite field of tariff revision. Each 
of these measures has a direct and definite bear¬ 
ing upon the business and the prosperity of the 


24 


country; each deserves to be settled upon its 
merits and free from political or partisan preju¬ 
dice. 


TO MAKE THE PANAMA CANAL A 
NATIONAL ASSET. 

[From the Manufacturers' Record, Sept. 7, 1911.] 

To make the Panama Canal on which the 
United States Government is spending $400,- 
000,000, a tangible national asset, its fullest 
utilization as a means for water transportation 
between the Atlantic and Pacific coast of the 
United States is essential. While the construc¬ 
tion of the canal may open the Atlantic and the 
Pacific to the commerce of the world and bring 
us in closer touch with the Orient than at 
present, its real value to the United States will 
be minimized unless it shall become the means 
of developing the full possibilities of coastwise 
commerce between the Atlantic and the Gulf 
coast and the Pacific coast. 

A few weeks ago Birmingham lost some 
heavy iron business with the Pacific coast be¬ 
cause a $10 freight rate from that city to San 
Francisco made it impossible for the South to 
compete with the cheap pig iron of China. At 
the present time enormous shipments of iron 
pipe are being made from the Birmingham dis¬ 
trict to California, a full trainload of 36 cars 
having started from Birmingham a few weeks 
ago, to be followed by two other trains carrying 
about the same number of cars loaded likewise 
with iron pipe for the coast. 

A reduction of freight rate on pig-iron and 
water pipe and other manufactured products of 
the South by reason of the establishment of in¬ 
dependent steamship service through the Pan¬ 
ama Canal would enable this section to its ad- 


25 



vantage and to the profit of the Pacific coast 
to vastly increase its trade with that section. It 
was long believed by many railroad authorities 
that the construction of an isthmian canal 
would prove disastrous to the railroads of the 
country by bringing about so great a reduction 
in freight rates as to lessen to an enormous ex¬ 
tent the earnings of the transcontinental rail¬ 
roads. To such an extent was this carried that 
investigations demonstrated, so it is stated, that 
the transcontinental railroad pool for years paid 
over $1,000,000 a year to the Panama Railroad 
Company to suppress water transportation by 
way of Panama. One of the ways in which this 
suppression was brought about, so it was stated, 
was by inducing the Panama Railway Company 
not to build its line to deep water. 

In the light of this situation Mr. B. N. Baker, 
of Baltimore, the dominant factor in the organi¬ 
zation and management of the Atlantic Trans¬ 
port Line, which for 20 years, until it was ab¬ 
sorbed by the International Mercantile Marine 
Company, built and maintained a magnificent 
fleet between Baltimore and New York and 
London, began a thorough investigation, in co¬ 
operation with the National Government, as to 
the feasibility of developing a first-class steamer 
service between the Atlantic and the Pacific 
through the canal, with a view to having a fleet 
of steamers ready by the time the canal is open 
for commerce. As demonstrating what can be 
done under such management as Mr. Baker and 
his associates gave to that enterprise, it is stated 
that in the 20 years of its life the Atlantic Trans¬ 
port Line never paid less than a rate of 10 per 
cent, per annum in dividends. 

The Government has surrounded the pro¬ 
posal for this ocean mail contract with the most 
rigid provisions to safeguard the company re¬ 
ceiving the contract from becoming in any way 
identified with any interest controlling competi- 


26 


tive transportation business by rail. The com¬ 
pany’s charter conforms to this condition. It 
specifies that no person will be eligible as a 
director who shall be a director in or an officer 
or agent of any corporation or association en¬ 
gaged in any competitive transportation busi¬ 
ness by rail. Any person elected as a director 
must take an oath that he is not a railway repre¬ 
sentative or is acting in the interest of any rail¬ 
way competition. 

The movement of Mr. Baker and his asso¬ 
ciates, if carried out as planned, will prove of 
national importance. It is the broadest enter¬ 
prise attempted for many years for the develop¬ 
ment of the ocean commerce of this country. 
The building of 15 steamers with which to start 
such a line at a cost of $15,000,000 or more, and 
the opening of this route to the trade of the 
country, will necessarily prove of enormous 
value to many interests. Not alone would it en¬ 
able the manufacturers and producers of the At¬ 
lantic and Gulf coast to put their goods into the 
Pacific coast trade at probably one-third of the 
present freight rate, but it would also enable the 
Pacific coast people to ship with equal facility 
to the Gulf and Atlantic coast. The develop¬ 
ment of such a trade would necessarily prove 
mutually advantageous. 

Coincident with this steamship line and sup¬ 
plemental to its work will be the establishment 
of subsidiary transportation lines to Central and 
South American ports. In fact, the develop¬ 
ment of Central American trade by way of the 
Panama Canal with all the Latin-American Re¬ 
publics in the immediate proximity of the canal 
zone is one of the objects for which the Atlantic 
and Pacific Transport Company has been or¬ 
ganized. This has been given the most careful 
investigation with a view to ascertaining the 
most effective means of meeting the peculiar 
trade conditions that will be encountered after 


27 


the physical disability of reaching both coasts 
is removed by the opening of the canal. With 
14,000,000 people living within a radius of 700 
miles of the canal zone, that territory, a moun¬ 
tainous region, is traversed by very few rail¬ 
roads, and these are of different gauge. There 
are few harbors at which steamers of deep draft 
can enter, so they have to remain in the offing 
for cargo, which must be delivered by lighters. 
To meet these conditions the Atlantic and Pa¬ 
cific Transport Company has already entered 
into tentative arrangements with the representa¬ 
tives of these republics for the right to operate 
seagoing, self-propelled steel barges of light 
draft from the canal entrances up and down the 
coasts for general assortments of cargoes in 
small and large shipments for and from the 
United States, which will be transferred to the 
mail steamers of the lines as they arrive at the 
entrances en route from ocean to ocean. The 
possibilities of this business were placed before 
the Isthmian Canal Commission so clearly that 
arrangements have been made at the canal for 
the construction of large docks and warehouses 
at both Colon and Balboa to provide for this 
class of traffic, so that it may be transferred 
without any material delay to the steamers as 
they pass through the canal. 


28 


OCEAN TO OCEAN COMPETITION. 

[From the New York Evening Post, Sept. 8, 1911.] 

This week the Atlantic and Pacific Transport 
Company of New Jersey was incorporated at 
Trenton, with authorized capital of $15,000,000. 
The company was formed, it was officially 
stated, to bid on the ocean mail service from 
coast to coast by way of the Panama Canal, now 
being advertised for by the Postmaster-General. 
Plans were already under way, it was said, for 
the immediate construction of no fewer than 
fifteen steamers. All of the requirements of 
the government, it was explained, had been 
complied with. Those requirements in brief 
are as follows: 

A weekly service must be established be¬ 
tween New York and Colon, New Orleans, and 
Colon, San Francisco and Panama, and fort¬ 
nightly trips must be made between Seattle and 
Panama; all steamers from New York must stop 
at Charleston or Savannah en route to Colon 
and from San Francisco they must stop at Los 
Angeles or San Diego en route to Panama, and 
from Seattle they must stop at Portland en 
route to Panama; no mail contract is to be 
awarded “to any bidder who shall be engaged 
in any competitive transportation business by 
rail;” every person serving as a director of a 
company making a successful bid must take 
oath that he is not a railway representative or 
is acting in the interests of any railway corpora¬ 
tion; the power of any director or shareholder 
to vote shall cease when it has been determined 
that such director or shareholder represents a 
competitive railway interest. 

Many people will ask why the government 
has placed such unusual restrictions upon suc¬ 
cessful bidders for mail contracts. The answer 
is that the Panama Canal when completed will 
bring San Francisco by water within fourteen 


29 


days of New York, less time than now taken by 
transcontinental freight trains, and with no ex¬ 
pensive roadbed equipment and service to mam- 
tain, steamboats will be able to handle coast to 
coast business at a much lower rate than the 
railroads. The Panama Canal when completed 
will have cost $400,000,000, money contributed 
indirectly by the people, and, judging from past 
experience, the government has reached the 
conclusion that unless the new steamship lines 
are operated independent of the railroads, the 
country will not get the full benefit of its in¬ 
vestment on the costly Panama Canal. That 
conclusion is based on facts established after a 
long and thorough investigation of the past and 
present relations between the railroads and the 
ocean steamship companies. In a recently pub¬ 
lished document dealing with the transconti¬ 
nental rate situation the Interstate Commerce 
Commission, after pointing out in detail how 
one Atlantic, Pacific and Gulf steamship com¬ 
pany after another had been bought up and 
eliminated by the railroads, had this to say 
about the old Panama route: 

“Thus far we have taken no account of the 
Panama route, which had been open and 
operated since the early days of the rush to the 
gold fields. This route was in the control of 
the Pacific Mail Steamboat Company. In 1871, 
hardly two years after the opening of the trans¬ 
continental rail route, the Union Pacific and 
Central Pacific railroads entered into agree¬ 
ment to subsidize the Pacific Mail, buying its 
space at an agreed figure, and often running 
the steamships empty. This arrangement was 
continued until 1881, when the steamship line 
was turned over to an association known as the 
transcontinental association, which continued 
the arrangement until 1893, so that during this 
period the Panama route offered no serious 
competition to the rail lines. 


30 



“And to continue the history of this negligible 
factor in sea competition, it may at this time be 
said that the Pacific Mail Steamship Company 
is now controlled, through stock ownership, by 
the Southern Pacific Company, and has been 
since the year 1900.” [Only recently, a pool of 
transcontinental railroads paid the Panama Rail¬ 
road over $1,000,000 a year to suppress water 
competition by way of Panama.] 

If the government is successful in its move¬ 
ment to establish one or more independent 
steamship lines which will engage in local At¬ 
lantic, Pacific, and Gulf business as well as in 
ocean-to-ocean trade, how will such competition 
affect the railroads? Because of its strong hold 
on steamship lines, especially on the Pacific 
Coast, the average rate per ton per mile on the 
Union Pacific is higher than it is on any other 
transcontinental line. How the Union Pacific’s 
average rate per ton per mile compares with 
the average for all roads and with that of the 
Pennsylvania, a typical Eastern system, is shown 
in the following tables: 

All Roads. U. P. Penn. 

(Cents.) (Cents.) (Cents.) 


1910. 0.753 1.02 0.58 

1909. 0.757 1.02 0.58 

1908. 0.765 1.00 0.56 

1907. 0.782 0.96 0.57 

1906. 0.766 0.91 0.59 

1905. 0.784 0.89 0.59 


According to reliable figures published this 
v/eek, the coast-to-coast business, which now 
amounts to 3,000,000 tons a year, is increasing 
at the rate of 10 per cent, a year and will, there¬ 
fore, amount to 4,200,000 tons by the time the 
Panama Canal is completed. On the basis used 
by the railroads, the coast-to-coast business now 
amounts to 9,000,000,000 tons per mile and will 
reach 1,260,000,000 tons per mile in 1913. The 
extent of that business is shown by the fact 
that last year Union Pacific’s total revenue 


31 








freight movement amounted to 5,997,000,000 
ton miles, that is, that many tons were hauled 
one mile. 

As a result of the recent ruling by the Inter¬ 
state Commerce Commission, the transconti¬ 
nental railroads must make an adjustment of 
their rates by October 15. Beyond question 
that adjustment will affect the average rate of 
those roads and a further reduction will doubt¬ 
less occur when independent steamship lines 
are established. But the whole system of rate 
making is based on the theory that a reasonable 
rate is “what the traffic will bear.” When rates 
are unreasonable or artificially made, the rail¬ 
roads as well as the public suffer from loss of 
business. Certainly the new Atlantic and 
Pacific Transport Company has no fears for the 
future. In this week’s statement that company 
said: 

“It is the purpose of this line to develop the 
entire domestic commerce of the country via 
the Panama Canal as fully as it may be done by 
modern water transportation. In this, it be¬ 
lieves, it has one of the greatest opportunities 
of the centurv.” 


32 


PREPARING FOR CANAL TRAFFIC. 

[From the Philadelphia Record, Sept. 10, 1911.] 

In anticipation of the large volume of traffic 
expected on the promised opening of the Pan¬ 
ama Canal in 1913 the Harbor Commission of 
Los Angeles is rushing work at San Pedro, 
which is to become the port of the “City of the 
Angels.” One hears a great deal about the 
preparations of . various European steamship 
lines for conduct of business via the canal with 
the Pacific coast direct; and several existing 
American lines appear to be contemplating 
coast-to-coast sailings by the same route. The 
most important, and also the most definite, an¬ 
nouncement of this character was made a few 
days ago, when a new steamship company, pro¬ 
posing to operate vessels between all important 
Atlantic, Gulf and Pacific ports, was incorpo¬ 
rated under the laws of New Jersey. 

One’s first impression on learning of an in¬ 
corporation under the extraordinarily facile 
statutes of that Trust-promoting State would be 
that a new combine against public interest v/as 
a-forming. It is a new sort of Jersey corpora¬ 
tion, however, which has been hatched. By the 
terms of its charter nobody connected with any 
competitive carrier, by land or by water, 
whether as director, officer or agent, will be 
eligible to like positions in the new steamship 
line. Should notice be given by the Postmas¬ 
ter-General that any stockholder in the company 
represents a competing interest such stock¬ 
holder would be prohibited by the charter from 
voting his stock. Instead of giving the holders 
of a majority of the shares absolute control of 
the company, the principle of voting adopted 
would give the smaller investors a proportion¬ 
ately greater voice in the management than to 
the owners of large blocks. 

It is true these concessions in the charter 
are made in deference to the requirements of 


33 


the Government. No conrtacts to carry inter¬ 
coastal mail will be made with any steam¬ 
ship company which is owned or controlled 
by another transportation company, whether 
through community of interest or otherwise. 
But, whatever may be the reason or the com¬ 
pany’s self-denying ordinance, the incorporation 
thereof in the company’s charter is a gratifying 
fact. The company will issue neither bonds 
nor preferred stock, and its share capital will 
represent actual investment only. The estab¬ 
lishment of a “floating mercantile and banking” 
system is contemplated, with bank clerks aboard 
all freight ships to facilitate the handling of 
business along the coasts of this country and 
South America. As a beginning the company’s 
fleet will consist of fifteen steamers, the con¬ 
struction whereof will be undertaken at once so 
that all may be ready for service when the canal 
is opened. 


COMMERCE FOR THE CANAL. 

[From the Baltimore American, Sept. 6, 1911.] 

A canal across the Isthmus of Panama, cost¬ 
ing a large fraction of a billion of dollars and 
relatively little commerce to steam through it, 
was the anomalous situation which caused many 
opponents of the construction of the great water¬ 
way to shake their heads about the government 
placing the cart before the horse. But there 
were experts in ocean steamship business who 
knew the water routes with absolute informa¬ 
tion as to the conditions that dominate water 
carriage, who placed their views at the service 
of the government and thus brought about a 
most promising condition for the development 
of isthmian commerce proportionate to the vast 
expenditure entailed by the government in the 
construction of the work. 

Perhaps in no respect has Mr. Bernard N. 
Baker, of Baltimore, featured more creditably 


34 



than as an expert called in by the War Depart¬ 
ment to advise with it as to the actual com¬ 
mercial necessities of the country with respect 
to the Panama route. The incorporation of the 
Atlantic and Pacific Transport Company, which 
is admirably planned to create and to operate 
lines of steamships and barges to care for the 
wide trade within the commercial field of the 
canal, has been in direct response to an ap¬ 
preciation of the country’s needs. 

The ocean mail service now being advertised 
by the Postmaster-General calls for weekly 
service between New York and Colon, New 
Orleans and Colon, San Francisco and Panama, 
and fortnightly between Seattle and Panama. 
This is the best sign of the approaching comple¬ 
tion of the canal and the best indication the 
government can give of its desired aid in build¬ 
ing up a great commercial fleet. With finely 
equipped ships sailing from various Atlantic 
ports, with Baltimore at the lead of these, and 
with an area close to Panama that represents a 
commercial field of nearly half a billion of dol¬ 
lars open to exploitation, the prospect for the 
stimulation of Panama trade is the best. The 
curious situation of this country getting but six¬ 
ty-four cents out of the four dollars and twen¬ 
ty-two cents per capita expenditures in this area 
will be corrected. The United States will be, 
as it should be, the best commerce-absorbing 
country for South America and the best supplier 
of the needs of the republics upon the Pacific 
Coast, beside being the country to furnish the 
capital for the development of the untouched 
resources of the Southern continent. 

Truly the prospect for the trade of the United 
States through the Panama Canal is most en¬ 
couraging. All that is needed is the enterprise 
and address of farseeing private investors fully 
acquainted with the needs of the situation in 
order that from the first the Panama Canal shall 
be a vast world trade artery. 


35 


THE ISTHMIAN ROUTE. 

[From the Boston Herald, Sept. 16, 1911.] 

Two factors work together to make feasible 
the development of an extensive American 
steamship service such as Mr. Baker and his 
colleagues propose. One is the too little known 
ocean mail law of 1891, which grants to Ameri¬ 
can-built steamships a graded compensation for 
carrying the United States mails to ports of for¬ 
eign countries. Efforts to make this law ef¬ 
fective on the long and costly routes to the re¬ 
moter ports of South America and the Orient 
have been defeated by fresh water provincialism 
in Congress, but on the shorter routes to the 
West Indies and the Caribbean region this law 
has proved entirely successful and has created 
and maintained a good steam fleet under the 
ensign of the United States. There are al¬ 
ready excellent American steamship services to 
Cuba, Jamaica, Mexico and Venezuela, and the 
government in the name of the Panama rail¬ 
road is operating an American line to Colon. 
This government line, however, would pre¬ 
sumably be surrendered at the opening of the 
canal when the waterway will become a field of 
general commercial competition. 

The Atlantic and Pacific Transport Company 
in bidding under the ocean mail law simply pro¬ 
poses to undertake a service of a character 
which other American lines are already satis¬ 
factorily performing to ports of adjacent foreign 
countries, in competition with the ships of all 
the world. But to the ocean mail compensation 
there will be added in the case of an Isthmian 
line another potent factor of success in the form 
of the coastwise law, which forbids a foreign 
vessel to carry any freight between American 
ports of the Atlantic coast and American ports 
of the Pacific seaboard, including Hawaii. It is 
the plan of the Atlantic and Pacific Transport 


36 



Company, as it will be the plan of any other 
American concern bidding for the Isthmian serv¬ 
ice, to run its ships right through the canal 
from coast to coast, earning and receiving the 
mail compensation only for the outward voyage 
to the Canal Zone, but transporting freight and 
passengers and receiving the protection of the 
coastwise laws for the entire distance, say from 
New York to San Francisco. 

This great coastwise commerce will of course 
be open to any American ship. The govern¬ 
ment is offering mail compensation under an 
exclusive contract to the lowest responsible bid¬ 
der only in order to secure a guarantee of a 
swift express service and regular sailings. 
These mail ships will receive government pay 
which ordinary freighters cannot command, but 
on the other hand the mail steamers will have 
to perform a rapid and therefore a costly serv¬ 
ice and will be held under special obligations to 
the government. They must be built on de¬ 
signs approved by the Navy Department and 
with decks so strengthened that they can im¬ 
mediately mount guns in war, and their owners 
must deliver them to the United States when 
ordered. 

The Postoffice Department in proposals for 
this service specifies that Atlantic ships are to 
sail from New York, touching at Charleston and 
Savannah, but Mr. Baker has assured our mer¬ 
chants that his company has plans for an 
Isthmian freight service out of Boston. This 
will be welcomed here, for a special deficiency 
in Boston’s trade is direct communication with 
the ports of Latin America beyond the northerly 
ports of the West Indies. To award this im¬ 
portant contract means a boom in American 
ship building, for the United States law, like 
the law of Great Britain and Germany, requires 
that ships of national mail lines shall be of home 
construction. 


37 


THE POSTOFFICE DEPARTMENT 

PROVIDING AMERICAN SHIPS 

FOR THE PANAMA CANAL. 

[From the New York Marine Journal, Aug. 5, 1911.] 

Postmaster-General Hitchcock has done a 
wise and important work in preparing betimes 
for the greatly increased commerce between 
our Atlantic and Pacific seaports, which will 
be the chief benefaction of the Panama Canal. 

The Postmaster-General is acting under the 
ocean mail law of 1891, which authorizes the 
payment of a compensation not to exceed two 
dollars a mile for the carrying of the United 
States mails in steamships of the second class, 
of a speed of at least 16 knots an hour—these 
steamships to be built in the United States, on 
designs approved by the Navy Department, and 
to be turned over to the Government in time of 
war. There ought to be a quick response to 
this farseeing proposal. A weekly service from 
New York to Colon, calling at Charleston or 
Savannah or both; from New Orleans to Colon 
and from Seattle and San Francisco to Panama, 
calling at San Pedro or San Diego or both, in 
steamships of the speed contemplated, will 
mean a notable addition to the maritime re¬ 
sources of the United States. Such a service 
would require at least a dozen steamships of 
high character. As all the available tonnage 
of this kind in this country is now steadily em¬ 
ployed, new ships will have to be built in Amer¬ 
ican yards before the new service can be es¬ 
tablished. 

There is careful provision against the control 
of the route by competing railroad companies. 
The service will have to be a steamship service 
pure and simple, standing on its merits as an 
independent line. Bidders will doubtless have 
to give convincing assurance to the Government 
that they are not directly or indirectly controlled 


38 


by railroad corporations. The service must be 
begun in the Fall of 1914 so that it will be in 
readiness when the Panama Canal is opened. 
It will cost the Government presumably about 
$775,000 a year—and it will be well worth it. 
Undoubtedly Postmaster-General Hitchcock has 
taken counsel in this matter with President 
Taft. It is another distinctly progressive act of 
a genuinely progressive administration. 


SHIPS FOR PANAMA CANAL. 

[From the Findlay Republican, September 14, 1911.] 

The lecture in this city last week on the 
Panama Canal by Engineer Wyndham, who has 
been connected with the building of that enter¬ 
prise since 1878, has revived local interest in 
the big undertaking. It has been frequently 
asserted that the United States is building a 
canal for the use of foreign nations because 
there are only seven vessels flying the Stars and 
Stripes that ply between United States and 
foreign ports. 

However, a steamship company has just been 
incorporated to build ships and operate them 
between New York and San Francisco via the 
Panama Canal, and the provisions in the char¬ 
ter which has been granted this new company 
show the policy of the government regarding 
American lines for this traffic. 

The service is to be absolutely independent 
of any competitive rail or steamship enterprise; 
nobody connected in any way with a competing 
line is to be eligible as a director in the new 
company. Another feature, due to government 
requirements, is that underwriting syndicates 
and stock watering for the benefit of promoters 
are absolutely barred. 

In return for these provisions the Govern¬ 
ment binds itself not to let mail contracts to 


39 



any steamship company not conforming to the 
same requirements. Thus it appears that there 
will be competition with the transcontinental 
railroads, by water, for the carrying of the mails 
between our eastern and western coasts by the 
opening of the canal in 1913. 

The incorporation of this company seems the 
beginning of preparation on a large scale for 
the opening of the canal. Certainly it is to be 
desired that the canal, dug by the United States, 
should be used by vessels of this country, and 
that in the carrying of the mails there should be 
competition. The building of the canal might 
be justifiable, of course, as a military enter¬ 
prise even if the traffic through it were to be, 
as has often been predicted, only that of ships 
flying foreign flags, but it will be no small grati¬ 
fication to American pride, and perhaps no 
small benefit to the nation, to have lines of 
American ships using it as soon as it is opened. 


40 



ON ACCOUNT OF THE CANAL. 

[From the Portsmouth Blade, September 15, 1911.] 

It really begins to look as if the building of 
the Panama Canal would start Americans to 
building American merchant ships. 

The Atlantic and Pacific Transport Company 
has been incorporated with a capital of $15,- 
000,000. It contemplates building fifteen ships 
which are to be ready to carry freight and pas¬ 
sengers between American-Atlantic and Pacific 
ports via the Panama Canal. 

This enterprise is in response to a request 
of the Postoffice Department for bids for the 
carrying of mail between the two oceans via 
the canal. Liners that would carry mails also 
would carry freight and passengers. The 
Cleveland Leader illuminates this subject by 
throwing the following light upon it: 

“Little doubt is entertained as to the success 
of the venture. Two years ago the coast to 
coast traffic by ocean and across the isthmus 
amounted to about 3,000,000 tons per annum 
and it has been increasing at the rate of 10 per 
cent, a year. The necessity of transshipment 
by rail across Panama being eliminated the 
freight traffic on the canal route ought from the 
start to be far in excess of 4,000,000 tons a 
year. And it is reasonably certain that a large 
passenger business will soon be developed. 
Americans are great travelers and the new 
tourist routes opened by the canal will attract 
them.” 

If nothing happens to the great ditch, and 
engineers appear to have dismissed all their 
earlier fears, Uncle Sam will be in great good 
humor when the enterprise shall have been 
finished. Doubtless he will find that he builded 
wiser than he knew in more than one particular. 
At any rate, if the canal helps to put the Stars 
and Stripes back upon the high seas it will have 
done what no American Congress has been 
capable of doing. 


41 


THE PANAMA CANAL STEAMERS. 

[From the Cleveland Leader, September 13, 191 l.J 

The Panama Canal is nowhere near com¬ 
pletion, but already evidences of the great 
changes it will bring about are making their ap¬ 
pearance. Most notable of these is the Atlantic 
and Pacific Transport Company, just incorpo¬ 
rated with a capital of $15,000,000. 

This big concern is early in the field on ac¬ 
count of the request of the Postoffice Depart¬ 
ment for bids for the carrying of mail between 
the Atlantic and Pacific coasts by way of the 
canal. It contemplates building fifteen steam¬ 
ships to be ready for service by 1913. These 
boats, of course, will carry cargoes of mer¬ 
chandise and passengers as well as mail. 

Little doubt is entertained as to the success 
of the venture. Two years ago the coast to 
coast traffic by ocean and across the isthmus 
amounted to about 3,000,000 tons per annum 
and it has been increasing at the rate of 10 per 
cent, a year. The necessity of transshipment 
by rail across Panama being eliminated the 
freight traffic on the canal route ought from the 
start to be far in excess of 4,000,000 tons a 
year. And it is reasonably certain that a large 
passenger business will soon be developed. 
Americans are great travelers and the new 
tourist routes opened by the canal will attract 
them. 

The benefits will be even wider. Cheap 
water transportation is sure to lower the trans¬ 
continental railroad rates. Commerce with 
South American countries is bound to increase. 
Many lines of business will feel the effects, in¬ 
cluding the railroads. 


42 


A CORPORATION WITH A SOUL. 

[From the Literary Digest, September 16, 1911.] 

The formation of the Atlantic and Pacific 
Transport Company, which will operate a line 
through the Panama Canal and whose service 
shall be entirely independent of competing rail¬ 
way interests, leads a number of editors to de¬ 
clare that at last here is a corporation with a 
soul. Of particular interest is its plan, remarks 
the New York Everting Post, because “nobody 
who is connected with any competitive rail or 
steamship enterprise, whether as director, of¬ 
ficer, or agent, is to be eligible as director in 
the new company;” even a stockholder is to be 
barred from voting on any question if “such 
stockholder represents a competing interest;” 
“holders of large blocks of stock shall have less 
voice in proportion to their holdings than the 
small investor;” and there is a feature which 
keeps out “both underwriting syndicates and 
stock watered to give a bonus to promoters.” 

These provisions for making a “good” corpo¬ 
ration have been prescribed chiefly by the 
United States Government; the new company 
has acquiesced in them and will bid for the 
Federal mail contracts for service between New 
York and Colon, San Francisco and Panama, 
New Orleans and Colon, and Seattle and Pan¬ 
ama. The Government is wise, thinks the 
Evening Post, to set a mark for the official car¬ 
rier to toe, for, it says: 

“The reason for all this scrupulous provision 
may readily be found in the past history of the 
Panama route between our Eastern and West¬ 
ern coasts. Through ownership of such facili¬ 
ties, direct or indirect, and often through heavy 
cash subsidies to the Isthmus railway and the 
steamship line connecting with it, the trans¬ 
continental railways have for a very long time 
past been able to block the competitive possi- 


43 


bilities of the ocean route. The effect of an 
absolutely independent service, barred at the 
outset from any entanglements of the sort, on 
our future trade with South America and on the 
commerce between our own two coasts, will 
provide a highly interesting test of the merits 
of rigidly supervised incorporation.” 


PANAMA AND COMPETITION. 

[From the St. Paul Dispatch _, September 12, 1911.] 

An intimation of what may be expected in 
the way of benefits when the Panama Canal is 
in operation is contained in the announcement 
of the incorporators of the Atlantic and Pacific 
Transport Company. They are experienced 
steamship men, four of them having been offi¬ 
cers in the old Atlantic Transport Company be¬ 
fore that concern was absorbed by the Inter¬ 
national Mercantile Marine Company, and one 
having been identified with the Wilson line. 

The incorporators propose the immediate con¬ 
struction of ships to enable them to bid on the 
mail service now being advertised by the Post¬ 
master-General. The Postoffice Department 
calls for a weekly service between New York 
and Colon, New Orleans and Colon, and San 
Francisco and Panama and fortnightly service 
between Seattle and Panama. The company 
proposes to maintain that mail service and when 
the canal is opened the boats will make con¬ 
tinuous trips from ports on the two coasts. 

The incorporators announce that every effort 
will be made to guard against railway influ¬ 
ences. It is proposed to keep the stocks of the 
corporation out of the hands of those who have 
railway affiliations and to make the line inde¬ 
pendent. A few such corporations actually in 
the field will solve the problems of competition 
and rates and undoubtedly be of great value to 
the public at large. 


44 



FREIGHTS AND WATER ROUTES. 


[From the Seattle Post-Intelligencer, Sept. 16, 1911.] 

Mr. B. N. Baker, of Baltimore, who is at the 
head of a new company which proposes to 
build a line of steamships to ply between At¬ 
lantic and Pacific coast ports, using the Panama 
railroad as a connecting link, until such time 
as the canal is completed, in talking to the 
members of the newly created port commission, 
called attention to the fact that ninety per cent, 
of the business between East and West ports is 
done by the railroad lines at the present time; 
and the railroad through business is expanding 
at the rate of ten per cent, a year. In view of 
the rapidity of growth of traffic, he did not be¬ 
lieve the water routes would affect the rail¬ 
roads any more seriously than water competi¬ 
tion on the Great Lakes affects them. 

There is, however, a difference in the situa¬ 
tions. The actual cost of moving goods by 
water from the Atlantic seacoast to the Pacific 
coast, when the canal is completed, will be far 
below the actual cost of moving freight by rail. 
The amount of business which will go by the 
steamship lines will depend solely upon the 
number of vessels which enter the trade. If 
vessel owners are satisfied with a fair freight 
rate, they can be assured full cargoes in each 
direction, to almost any amount. 

Of course, the railroads must of necessity 
lose some of their present business, so far as 
the transcontinental haul is concerned. But the 
haul across the continent is not now the paying 
part of their traffic. In that they have today 
water competition and their rates have to be ad¬ 
justed to meet that competition even now. It 
is the short hauls that pay; the local business. 

The railroads can readily recoup all of the 
losses through movement by water between At- 


45 


lantic and Pacific ports if they encourage the 
expansion of the jobbing business in the Pa¬ 
cific ports. The bigger the jobbing business of 
Seattle — the further East it extends — the 
greater the volume of paying business which 
the railroads which terminate here will have. 


PANAMA CANAL WILL PROVE A 

GREAT ASSET FOR THE WEST. 

[From the Spokane Chronicle, September 7, 1911.] 

A transportation company has been organized 
in New Jersey with an authorized capital of 
$15,000,000 for the purpose of exploiting the 
Atlantic-Pacific seaboard trade. The immediate 
reason advanced for the organization is to bid 
on the ocean mail service, but its ultimate ob¬ 
ject is the immediate development of the im¬ 
mense shipping industry which will attend the 
opening of the Panama Canal. 

Here is a solid fact for those who have felt 
disposed to minimize the importance of the 
canal and its value to the Pacific northwest. 
Although the west has won the Panama exposi¬ 
tion, the east has been first to reach out for this 
great business asset in the canal. 

The value of a business proposition may be 
determined by the ability of the enterprise to 
give cheaper or better service, or both. That 
the Panama Canal has a tremendous signifi¬ 
cance from the standpoint of improved service 
to the people of the two coasts is forcibly sug¬ 
gested by this early movement of eastern 
capital. 










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